Item 1.01
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Entry into a Material Definitive Agreement.
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Issuance of Notes
On October 31, 2019, New Residential Investment Corp. (the “Company”), NRZ Advance Receivables Trust 2015-ON1 (an indirect subsidiary of the Company, the
“Issuer”), HLSS Holdings, LLC (an indirect subsidiary of the Company, “HLSS”), Deutsche Bank National Trust Company (“Deutsche Bank”), PHH Mortgage Corporation (“PMC”), New Residential Mortgage LLC (a subsidiary of the Company,
“NRM”), NewRez LLC d/b/a Shellpoint Mortgage Servicing (a subsidiary of the Company, “Shellpoint”), and Credit Suisse AG, New York Branch (“Credit Suisse”) entered into a financing transaction pursuant to which the Issuer issued
$300,000,000 of rated receivables backed term notes (the “Series 2019-T5 Notes”).
The Series 2019-T5 Notes are all issued under that certain Third Amended and Restated Indenture, dated as of July 25, 2019, by and among the Issuer,
Deutsche Bank, HLSS, Credit Suisse, PMC, NRM and Shellpoint (the “Indenture”) and the Series 2019-T5 Indenture Supplement thereto among the parties to the Indenture and the Company (the “Indenture Supplement”). A copy of the
Indenture Supplement is attached to this Current Report on Form 8-K as Exhibit 4.1 and is incorporated by reference herein.
The proceeds of the Series 2019-T5 Notes were used to acquire receivables from another subsidiary of the Company. Such other subsidiary then used such
proceeds to repay indebtedness owing by such other subsidiary.
The Series 2019-T5 Notes are secured by servicer advance receivables made by PMC, Shellpoint and NRM and accrued and unpaid servicing fees payable under
certain identified residential mortgage loan servicing agreements. The collateral securing the Series 2019-T5 Notes cross-collateralizes five other series of outstanding notes previously issued by the Issuer.
The Series 2019-T5 Notes bear fixed interest, varying by class, ranging from 2.42% to 4.38% per annum. The revolving period for the Series 2019-T5 Notes
ends on October 15, 2021. If the Series 2019-T5 Notes are still outstanding at the end of the revolving period, the Issuer will be required to repay one-twelfth of the remaining principal balance of the Series 2019-T5 Notes each
month until the principal balance of the Series 2019-T5 Notes is paid in full.
The events of default and target amortization events under the Series 2019-T5 Notes include customary events such as: (i) failure to satisfy an interest
coverage test, (ii) failure to satisfy a collateral performance test measuring the ratio of collected advance reimbursements to the balance of advances; (iii) failure to deliver certain reports; (iv) material breaches of any of the
transaction documents (subject to applicable cure periods), (v) non‑payment of principal, interest or other amounts when due, (vi) insolvency of PMC, HLSS, Shellpoint, NRM or the subsidiaries of HLSS party to the transaction
documents; (vii) the Issuer becoming subject to registration as an “investment company” within the meaning of the 1940 Act; and (viii) PMC, Shellpoint or NRM failing to comply with the deposit and remittance requirements set forth in
any pooling and servicing agreement or such definitive documents.
Upon the occurrence of an event of default or a target amortization event (including because of the end of the related revolving period) in respect of
the Series 2019-T5 Notes, there is either an interest rate increase on the Series 2019-T5 Notes, a rapid amortization of all or a portion of the Series 2019-T5 Notes or an acceleration of principal repayment, or all of the foregoing.
Upon the occurrence and during the continuance of an event of default under the facility, the requisite percentage of the related noteholders may declare
the Series 2019-T5 Notes and all other obligations of the applicable issuer immediately due and payable and may terminate the commitments. A bankruptcy event of default causes such obligations automatically to become immediately due
and payable and the commitments automatically to terminate.
The definitive documents related to the Series 2019-T5 Notes contain customary representations and warranties, as well as affirmative and negative
covenants. Affirmative covenants include, among others, reporting requirements, provision of notices of material events, maintenance of existence, maintenance of books and records, compliance with laws, compliance with covenants under
the designated servicing agreements and maintaining certain servicing standards with respect to the advances and the related mortgage loans. Negative covenants include, among others, limitations on amendments to the designated
servicing agreements and limitations on amendments to the procedures and methodology for repaying the advances or determining that advances have become non-recoverable.